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Ather Energy, the top electric scooter maker in India, has made a major cut in its initial public offering (IPO) size, reducing the offer-for-sale (OFS) shares to 11.05 million from the previous 22 million shares. The fresh issue of shares has also been reduced to ₹26.26 billion from ₹31 billion, as the company takes a cautious route in the face of volatile market conditions.
Key Highlights:
IPO Size Reduction: The updated IPO now seeks a size of between ₹2,900 crore and ₹3,200 crore ($350 million to $375 million) from the previous ₹3,500 crore to ₹3,700 crore range. This represents a more or less 25% cut in the size of the offering.
Valuation Adjustment: Ather Energy's post-money valuation has been reduced to around ₹12,800 crore, down from earlier estimates of ₹14,000 crore and previous aggressive targets of ₹17,000 crore to ₹20,000 crore.
Offer-for-Sale Reduction: The OFS component has been reduced by half to 11.05 million shares, representing choice early investors' decision to dilute fewer shares in light of subdued investor sentiment.
Promoter Stake: Hero MotoCorp, with more than 37% stake in Ather, is not selling its shareholding in the share sale.
Market Conditions: The downsizing is due to turbulent global market and domestic market volatility, which has reduced investor interest in new listings, particularly in the electric vehicle segment.
IPO Timeline: While originally scheduled in early 2025, the IPO launch has been delayed and is now proposed to happen in May, without any withdrawal plans despite the alterations.
Investor Interest: Institutional investors such as Tiger Global, Caladium Investments, and National Investment and Infrastructure Fund are anticipated to take part in the offer-for-sale.
Even though the IPO size and valuation are reduced, Ather Energy is still determined to go public with a view to utilizing the funds raised for increasing production capacity, diversifying its product offerings, and enhancing its market leadership in India's rapidly growing electric two-wheeler space.
Sources: CNBC TV18, Business Standard, Bloomberg
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